UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT JANUARY 3, 2001
COMMISSION FILE NUMBER 1-10948
OFFICE DEPOT, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 59-2663954
---------------------------------- --------- --------------------------
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
2200 OLD GERMANTOWN ROAD, DELRAY BEACH, FLORIDA 33445
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(561) 438-4800
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT: N/A
ITEM 5. OTHER EVENTS
On January 3, 2001, Office Depot Inc. issued a press release announcing certain
strategic changes for the company and also disclosing its plans to take a charge
to earnings for the fourth fiscal quarter of its 2000 fiscal year. A copy of
this press release is attached hereto as Exhibit 99.1 and incorporated by
reference herein.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
99.1 Copy of Office Depot, Inc.'s January 3, 2001 Press Release.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
OFFICE DEPOT, INC.
Date: January 3, 2001 By: /S/ DAVID C. FANNIN
David C. Fannin
Executive Vice President and
General Counsel
OFFICE DEPOT
[GRAPHIC OMITTED] NEWS RELEASE
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CONTACT: INVESTORS:
EILEEN H. DUNN
VICE PRESIDENT, INVESTOR RELATIONS/PUBLIC RELATIONS
561/438-4930
edunn@officedepot.com
---------------------
MEDIA:
LAUREN GARVEY
DIRECTOR, MEDIA RELATIONS
561/438-2895
lgarvey@officedepot.com
-----------------------
OFFICE DEPOT REPORTS RESULTS OF BUSINESS REVIEW;
OUTLINES STRATEGIES & PRIORITIES FOR THE FUTURE
O TO TAKE CHARGE IN FOURTH QUARTER 2000 AND INVEST IN BUSINESS
IMPROVEMENTS IN 2001 TOTALING AS MUCH AS $400 MILLION
O FOURTH QUARTER CHARGE IN RANGE OF $280-$300 MILLION BEFORE TAXES
- CLOSE 70 NORTH AMERICAN RETAIL STORES
- REDUCE SKUS IN STORES AND WAREHOUSES TO STREAMLINE
OPERATIONS AND FOCUS ON CORE BUSINESS CUSTOMERS
- WRITE DOWN VALUE OF CERTAIN INTERNET HOLDINGS AND
INTERNATIONAL ASSETS
O TO INVEST MORE THAN $110 MILLION IN CAPITAL AND INCREMENTAL
OPERATING EXPENSES TO IMPLEMENT STRATEGIC INITIATIVES IN 2001
- IMPROVE SHOPPING EXPERIENCE IN RETAIL STORES
- IMPROVE QUALITY AND EFFICIENCY IN NORTH AMERICAN
WAREHOUSES
o COMPANY OUTLINES PLANS FOR SALES GROWTH AND PROFITABILITY
- EPS FORECAST TO GROW 15% IN 2001
- INTERNET SALES EXPECTED TO HIT $1.5 BILLION IN 2001; $2.5
BILLION BY 2003 - INTERNATIONAL SALES GROWTH EXPECTED TO
EXCEED 20% IN LOCAL CURRENCIES FOR 2001
------------------------------
(DELRAY BEACH, FL) JANUARY 3, 2001 -- OFFICE DEPOT, INC. (NYSE: ODP), the
world's largest seller of office products, made several announcements today (1)
related to releasing the results of its extensive business review process and
(2) concerning its strategic plans to enhance future business prospects. The
objectives of the plans
contained in its announcements are to make the Company a more compelling place
to shop for its customers and a more compelling place to work for its employees
- - and to restore the Company's businesses to growth rates and returns across all
business segments that will make Office Depot once again a compelling place to
invest.
Bruce Nelson, Office Depot's CEO, stated, "Our business review was comprehensive
in scope and looked at every aspect of our business. Our goals are simple. While
continuing our global position as the $12 billion industry leader in sales of
office products, we intend to restore rates of growth and profitability on a
total company basis that will make Office Depot a compelling choice not only for
our customers and our employees, but also for investors. The most immediate
impact of our announcement is a charge to earnings for our fiscal year 2000 in
the range of $280 million to $300 million before taxes, primarily related to our
decision to close 70 retail stores. But equally important are our plans to spend
over $110 million incrementally in 2001 to substantially improve the customer
experience in our retail stores and in all other channels in which we sell."
DETAILS OF THE COMPANY'S ANNOUNCEMENTS ARE AS FOLLOWS:
- ------------------------------------------------------
1. As a result of its extensive review of all its retail stores in North
America, Office Depot will close 67 under-performing retail stores in the
U.S. and 3 stores in Canada. In connection with these closings, Office
Depot is leaving four markets completely -- Cleveland and Columbus, Ohio;
Phoenix and Boston. The Company also will close six small "express" stores
in France.
2. To reduce complexity in its warehouses and to return the focus in its
retail stores to the core business customer, Office Depot will reduce SKUs
in its retail stores by approximately 20% and in its warehouse operations
by approximately 30% by the end of the first quarter of 2001. The benefits
for customers will be better service levels and better "in-stock" positions
on products that customers buy most often.
3. In order to address capacity constraints and improve efficiency, the
Company plans to relocate warehouses in Atlanta and Baltimore in 2001. As
part of its overall warehouse initiatives, the Company also will invest in
new warehouse technologies to improve the quality and efficiency of all its
U.S. warehouse operations.
4. As a result of an extensive review of contract customer profitability, the
Company has taken a number of actions to improve the operating performance
of its contract sales business. These include a close evaluation of account
level profitability and a 10% reduction in its contract sales force, as
well as the previously announced consolidation of call center operations.
5. The Company also carefully reviewed the value of its holdings in a number
of Internet companies, most of which are also strategic marketing partners
with Office Depot. As a result of this review, Office Depot plans to write
down the value of its investment in a number of these privately held
Internet companies by approximately $45 million before taxes to better
reflect the value of these investments given the current economic
conditions, the markets for Internet companies today, and the changing
environment for investments in these types of businesses. Included in the
2
Company's year-to-date results, are a series of gains from sales of
Internet investments totaling approximately $58 million before taxes.
6. Based on the results of Office Depot's retail store operations in Japan,
the Company plans to write off $12 million before taxes of goodwill related
to Office Depot's acquisition of the remaining 50% ownership interest from
its former joint venture partner in Japan in April 1999.
- --------------------------------------------------------------------------------
IN SUMMARY, AS A RESULT OF ITS BUSINESS REVIEW, THE COMPANY EXPECTS TO:
1 -- REPORT A CHARGE TO EARNINGS IN THE FOURTH QUARTER OF 2000, SUBJECT TO FINAL
ACCOUNTING ADJUSTMENTS, IN THE RANGE OF $280 MILLION TO $300 MILLION BEFORE
TAXES.
2 -- INCUR OPERATING EXPENSES OF APPROXIMATELY $50 MILLION AND CAPITAL
EXPENDITURES OF APPROXIMATELY $60 MILLION IN 2001 TO IMPLEMENT ITS STRATEGIC
INITIATIVES FOR THE FUTURE GROWTH AND PROFITABILITY OF THE TOTAL BUSINESS.
- --------------------------------------------------------------------------------
COMPONENTS OF THE CHARGES IN Q4 2000 AND INCREMENTAL EXPENSES AND CAPITAL
OUTLAYS IN 2001 ARE AS FOLLOWS:
- --------------------------------------------------------------------------------
2000* 2001* 2001*
- --------------------------------------------------------------------------------
CHARGE** CAPITAL*** EXPENSE***
- --------------------------------------------------------------------------------
NORTH AMERICAN RETAIL $210 $25 $30
BUSINESS SERVICE GROUP 10 30 15
CERTAIN INVESTMENTS IN INTERNET COMPANIES 45 ---- ----
INTERNATIONAL 20 ---- ----
OTHER 15 5 5
-------------------------------
TOTAL $300 $60 $50
- --------------------------------------------------------------------------------
*ALL FIGURES ARE REPORTED IN MILLIONS AND BEFORE TAXES
**FIGURES SHOWN REPRESENT THE UPPER END OF THE RANGE OF CHARGES AND ARE SUBJECT
TO FINAL REVIEW BY THE COMPANY'S AUDITORS
***CAPITAL AND EXPENSE ITEMS ARE ESTIMATES OF INCREMENTAL CAPITAL AND EXPENSE
ITEMS FOR 2001 (BEYOND NORMAL BUDGET ITEMS) AND ARE SUBJECT TO CHANGE
Bruce Nelson, commenting on these significant announcements, stated: "Our
business review was thorough, candid and self-critical. We focused on our
customers, the realities of our industry, many aspects of the competitive
landscape and the capabilities of our organization. In order to return our focus
to our core business customers, foster a winning culture among our employees and
restore credibility with the capital markets, we have had to make significant
and sometimes difficult decisions -- difficult primarily because they involve
people. But we have concluded our review on a very positive note. We see
enormous potential for our business to grow and prosper in 2001 and beyond."
3
* * *
(MORE FOLLOWS)
BUSINESS OUTLOOK FOR END OF 2000 AND ANTICIPATED 2001
OUTLOOK FOR FOURTH QUARTER 2000
- -------------------------------
In early November, Office Depot announced that sales performance in its North
American Retail Division during the month of October and in early November had
continued to trend downward. The Company stated at that time that it expected
comparable store sales in its 782 North American stores that have been open for
more than one year to be negative for the fourth quarter. Further, the Company
stated that if current trends continued, it believed that its comparable store
sales for the fourth quarter could be in the negative mid single digit range,
down from expectations discussed on Office Depot's second quarter conference
call in July 2000.
Based on sales results for the month of December, the Company now expects to
report fourth quarter comparable store sales in the negative 5% range. As a
result, Office Depot anticipates full year 2000 earnings per share, before
charges of $280 to $300 million (pre-tax) in the fourth quarter and other
charges disclosed in previous quarters, to be approximately $0.70. This figure
is subject to normal year-end adjustments, and actual earnings are scheduled to
be announced on February 15, 2001.
OUTLOOK FOR 2001
- ----------------
Based on the business review and the actions announced today, Office Depot
believes it is better positioned to achieve improved growth and profitability
and increased shareholder value in the future. Given the uncertain economic
outlook for 2001, and the results of closing 70 North American retail stores,
the Company now anticipates total Company revenue growth to be in the mid single
digit range for 2001 (on a comparable 52 week basis) and to return to
historically higher growth rates thereafter. As a result of the aggressive steps
taken to improve profitability, Office Depot believes it can generate an
approximate 15% increase in EPS in 2001 over its anticipated 2000 EPS numbers
before charges.
In 2001, Office Depot plans to add approximately 50 new retail stores, most of
which will be located in areas in which the Company currently enjoys strong
market positions, with the balance in under-served markets. In future years,
Office Depot expects to continue this approach to retail store expansion, with
an emphasis on market density in order to leverage advertising dollars and
cross-channel opportunities to create a seamless customer experience across all
channels. All new stores will be based on a more efficient platform of
approximately 20,000 square feet and will be more interactive in terms of the
customer experience.
Nelson commented on the future outlook for the industry and for Office Depot,
"While we recognize the signs of a softening economy, demand for office supplies
and products still outpaces economic growth in general and the proliferation of
technology products has driven an increasing demand for basic consumable
supplies, like inkjet cartridges,
4
toner and paper. While some markets in the U.S. may be approaching saturation,
the overall market is far from saturated. Great retailers are great merchants
and when they leverage market density, apply vigorous analytical criteria to new
site selection and capital investments, build brand awareness and impress
customers so much that they want to buy again, they can succeed. We intend to do
all of those things - and more - to improve our results."
He continued, "Our priorities for 2001 and beyond are: (1) restoring the health
and vitality of our U.S. retail stores operations (as to which we have taken a
giant step today with our decision to exit under-performing stores and markets);
(2) continuing to grow our international businesses at more than 20% per year in
local currencies; (3) expanding our industry-leading electronic commerce
business to an anticipated $2.5 billion business by 2003; and (4) realizing the
service levels and cost-savings that we must have in our warehousing and
delivery operations. We are committed to strengthening the Office Depot brand as
the recognized global leader in delivering office products and solutions to
business problems."
* * *
- --------------------------------------------------------------------------------
FURTHER DETAILS ON IMPACT OF TODAY'S ANNOUNCEMENTS ON
OFFICE DEPOT'S BUSINESS SEGMENTS
[ALL ITEMS ARE SUBJECT TO ACCOUNTING REVIEW & ADJUSTMENTS]
- --------------------------------------------------------------------------------
NORTH AMERICAN RETAIL STORES
- ----------------------------
Office Depot's business review process revealed several significant issues with
its retail stores. A careful study of current and anticipated future
profitability on a store-by-store, market-by-market basis resulted in a decision
to close 70 under-performing stores in the U.S. and Canada. In order to
emphasize products Office Depot's core business customers want, and to increase
facings and shelf space for key, high demand items, the Company will rationalize
its retail SKU assortment by approximately 20%, resulting in a $23 million
pre-tax write-down of inventory.
As a result, the total Q4 2000 charges, including closing and relocating stores,
accelerating certain asset write-offs, and SKU assortment rationalization for
the retail stores business will be approximately $210 million before taxes.
Nelson commented, "In recent years, our retail store expansion was less
successful than we want and need it to be. We also allowed our inventory
assortment to drift away from the items most important to our core business
customers. As a result, performance suffered in many of our stores, resulting in
our decision to close certain stores. Our decision to close unproductive
locations and rationalize SKUs to better serve the needs of our core business
customers means that Office Depot shoppers will benefit from better service
levels and better in-stock positions in all our remaining retail stores and in
our other selling channels."
5
In addition to items impacting the fourth quarter 2000, Office Depot has
outlined a comprehensive plan to update and enhance the shopping experience to
create a more compelling place to shop for customers. Management has earmarked a
total of $55 million ($30 million in operating expense before taxes and $25
million in capital) in 2001 to accomplish changes in retail stores, including
new lighting, signage, new plan-o-grams and the installation of broadband in all
its remaining 818 retail stores in North America.
BUSINESS SERVICES GROUP
- -----------------------
Office Depot's Business Services Group is a more than $3 billion business and
the sales leader in its category. Over the past three years, the contract
portion of this business segment has grown at a mid teens compounded annual
rate. The contract business faces several challenges and the Company anticipates
that the rate of growth of this business will slow somewhat in 2001, as
management: (1) concentrates more closely on account profitability and (2) works
to improve service levels, among other ways, by not over-burdening our
warehousing and delivery facilities.
Major areas of concern in the BSG business relate to operational complexity in
warehouses and in other aspects of operations. As announced on November 6, 2000,
Office Depot is in the process of consolidating its call centers. In addition ,
the Company also plans to replace and consolidate warehouses and implement new
technologies to enhance productivity and customer service levels which will
require incremental expenditures in 2001.
The Company plans to reduce stocked SKUs in its 28 North American warehouses and
begin to source them from wholesalers on an ongoing basis. These SKUs were
identified (largely high-cube and low demand items) as items that were not
essential to customers needs on a daily basis and could be sourced through
wholesalers without impacting customer service levels, and in fact, improving
service levels on certain items such as furniture.
In addition, the Company will invest in new warehouse technologies to improve
the quality and efficiency of its U.S. warehouse operations. In order to address
capacity constraints and improve efficiency, the Company plans to relocate two
warehouses in Atlanta and Baltimore, which are currently operating at levels in
excess of the capacities for which the existing facilities were designed.
Total charges in the fourth quarter of 2000 for the BSG business are in the
range of $10 million before taxes, and anticipated incremental expenditures for
new initiatives in 2001, over and above the Company's normal operating plan, are
in the range of $45 million ($30 million in capital expenditures and $15 million
in incremental expense items before taxes).
Nelson commented, "Our BSG business is one of our fastest growing business
segments. However, we cannot support continued growth rates in the double digit
range without investing in the improvement and replacement of warehouse and
distribution facilities, reducing complexity by rationalizing SKUs and
establishing a
7
seamless interface with wholesalers, increasing the use of
technology that touches on the customer experience and completing the
consolidation of Viking facilities scheduled to merge into Office Depot
warehouses in 2001."
"We will not intentionally grow beyond our ability to satisfy the needs of our
customers, and we will continue to focus on account profitability as a key
initiative of this business. As a result, we now expect BSG to grow in the low
double digit range in 2001, with an opportunity to return to historically higher
rates of growth once our infrastructure is better positioned to support that
growth and we have completed our profitability review at the account level."
ELECTRONIC COMMERCE
- -------------------
Office Depot does not report its e-commerce business separately from the BSG and
International Segments to which portions of it are related, and it has no
present intention to break out this business as a separate business segment.
However, this business is one of the Company's success stories. For 2000,
worldwide electronic commerce will account for almost $1 billion of total
revenues, and will do so profitably. Office Depot Websites are consistently
rated as among the best business sites in the U.S., and the Company has one of
the most successful networks of partnering and investment relationships in
global Internet retailing. Internationally, electronic commerce has grown
significantly in 2000, as Office Depot and Viking Office Products opened eight
new e-commerce sites outside North America during the year.
Office Depot anticipates that electronic commerce will continue to outpace other
aspects of its business in terms of rates of growth. By 2003, total global
e-commerce is expected to deliver sales in the $2.5 billion range.
Nelson commented, "We are absolutely committed to growing our e-commerce channel
as rapidly as possible, on a global basis. We see it, among other things, as a
tool for implementing positive change in the customer experience in our retail
stores. The installation of broadband capability in all our retail stores by the
end of 2001 will enable Office Depot to deliver customer business solutions in
the stores by means of readily accessing our own and related party Websites.
Increasingly, we are seeing that "bricks and clicks" retailers will be the real
success stories in the e-commerce sector, and we are well positioned to take
advantage of the winnowing out process in "pure-play" e-commerce businesses."
INVESTMENTS IN OTHER E-COMMERCE BUSINESSES
- ------------------------------------------
As a result of the business review process, Office Depot also has decided to
write down its portfolio of investments in Internet businesses by approximately
$45 million before taxes. These holdings are primarily businesses which are
privately held and which are involved in strategic marketing partnership
arrangements with Office Depot. This action is being taken to better reflect the
value of these investments given the current economic conditions, the markets
for Internet companies today, and the changing environment for investments in
these types of businesses. Earlier this year, Office Depot
7
reported a series of gains totaling $58 million before taxes on one and a
portion of another of its Internet investments.
CEO Nelson commented, "We have taken a critical review of our investments in
strategic business partners in the Internet segment in the light of significant
changes in the investment landscape for pure e-commerce companies. We still see
great value in selectively investing in businesses with which we can partner in
bringing creative new ideas and concepts to our customers, but clearly the
overall marketplace now dictates a lower valuation for investments in these
sorts of companies."
INTERNATIONAL BUSINESS SEGMENT
- ------------------------------
For the most part, our international businesses have been among Office Depot's
most successful. These are high growth, high operating margin and high ROI
businesses. We expect to continue to enjoy high double digit growth rates in our
international segment, and to open at least one new country in 2001. The Company
also expects to add new geographies in the years that follow. The first
international contract business opened in the UK in September, and four
additional countries are expected to be added in 2001.
Challenges in the Company's international businesses have been related to: (1)
currency fluctuations, (2) an unprofitable express store retail model in France,
and (3) a much slower than anticipated growth rate in Office Depot Japan. In
response to these challenges, Office Depot is taking several steps in Q4 2000 to
bring these segments of its business into line with business realities.
The largest of these adjustments is the write down of approximately $12 million
before taxes of goodwill related to the Company's acquisition of the remaining
50% ownership interest of its former joint venture partner in Japan in April
1999. The rate of growth and earnings of the retail store operations has been
substantially below the Company's expectations, and a determination has been
made that goodwill allocated to the retail operations is significantly impaired.
In addition to this write-off, Office Depot also will take charges in Q4 2000
for the closing of six express stores in France and other miscellaneous actions.
In 2001, the Company will add new distribution facilities in London and in
Germany to meet the growing needs of its mail order and contract customers.
Total anticipated charges in the fourth quarter 2000 for the International
businesses are in the range of $20 million before taxes. The Company has already
made plans to invest over $80 million in its 2001 operating plan, not related to
the business review, for new distribution facilities, entry into one new
European country, retail expansion in Japan and investments in systems and
e-commerce initiatives globally in the coming year.
Nelson stated, "International is a real success story for Office Depot, with
growth and profitability that clearly outpaces our domestic retail operations.
Our experience in Office Depot Japan has been challenging for us. However, this
is the second largest
8
market in the world for business products and services (behind only the United
States), and we are committed for the long term to that market. Overall, we will
continue to grow all aspects of our international business, add new geographies
and continue to build on our first mover advantages in the e-commerce field in
Europe, Japan, Australia and other countries."
- --------------------------------------------------------------------------------
Office Depot will hold a conference call today for investors and analysts at
8:00 AM (EST). The conference call will be available to all investors via
Webcast from our Web site at www.officedepot.com under "Company Information" and
"Investor Relations", both located at the top of the screen. Interested parties
may contact Investor Relations at 561-438-1680 for further information on the
conference call.
- --------------------------------------------------------------------------------
ABOUT OFFICE DEPOT
As of December 30, 2000, the Company operated 888 office supply superstores in
the United States and Canada, in addition to a national business-to-business
delivery network supported by 28 delivery centers, more than 60 local sales
offices and seven regional call centers. Furthermore, the Company had operations
in 16 countries outside of the United States and Canada, including 28 office
supply stores in France and seven in Japan that are owned and operated by the
Company; and 97 additional office supply stores under joint venture and
licensing agreements operating under the Office Depot name in five foreign
countries. The Company also operates an award-winning U.S. Office Depot brand
Internet Web site at www.officedepot.com where customers can access Office
Depot's low competitive prices seven days a week, twenty-four hours a day, and
it operates www.officedepot.co.jp in Japan and www.officedepot.fr in France as
well as Viking brand Web sites at www.vikingop.com in the United States,
www.viking-direct.co.uk in the United Kingdom, www.viking.de in Germany,
www.vikingdirect.nl in The Netherlands, www.vikingop.it in Italy,
www.vikingop.com.au in Australia, www.vikingop.co.jp in Japan and
www.vikingdirect.fr in France. Office Depot's common stock is traded on the New
York Stock Exchange under the symbol ODP and is included in the S&P 500 Index.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS: EXCEPT FOR HISTORICAL
INFORMATION, THE MATTERS DISCUSSED IN THIS PRESS RELEASE ARE FORWARD-LOOKING
STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995, AS AMENDED. FORWARD-LOOKING STATEMENTS, INCLUDING ALL OF THE PROJECTIONS
AND ANTICIPATED LEVELS OF FUTURE PERFORMANCE, INVOLVE RISKS AND UNCERTAINTIES
WHICH MAY CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE DISCUSSED HEREIN.
THESE RISKS AND UNCERTAINTIES ARE DETAILED FROM TIME TO TIME BY OFFICE DEPOT IN
ITS FILINGS WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION, INCLUDING
WITHOUT LIMITATION ITS MOST RECENT FILING ON FORM 10-K, FILED IN MARCH, 2000 AND
SUBSEQUENT 10-Q FILINGS, INCLUDING OUR MOST RECENT 10-Q, FILED ON OCTOBER 31,
2000. YOU ARE STRONGLY URGED TO REVIEW SUCH FILINGS FOR A MORE DETAILED
DISCUSSION OF SUCH RISKS AND UNCERTAINTIES. THE COMPANY'S SEC FILINGS ARE
READILY OBTAINABLE AT NO CHARGE AT WWW.SEC.GOV, WWW.10KWIZARD.COM AND AT
WWW.FREEEDGAR.COM AS WELL AS ON A NUMBER OF OTHER COMMERCIAL WEB SITES. IN
ADDITION TO THESE PRIOR CAUTIONARY STATEMENTS, YOU ARE CAUTIONED THAT FUTURE
PERFORMANCE MAY BE IMPACTED BY A
9
NUMBER OF ADDITIONAL MATTERS REFERRED TO IN THIS PRESS RELEASE. AMONG THESE ARE
THE FOLLOWING:
o THE VARIOUS INITIATIVES BEING ANNOUNCED TODAY MAY NOT ACHIEVE THE
DESIRED RESULTS FOR ANY NUMBER OF REASONS, INCLUDING (1) FAILURE
TO EXECUTE ON OUR PLANS ADEQUATELY, AND (2) UNFORESEEN
DIFFICULTIES IN ACHIEVING THE DESIRED RESULTS DUE TO
CIRCUMSTANCES BEYOND OFFICE DEPOT'S CONTROL.
o OFFICE DEPOT IS STILL BUILDING ITS NEW MANAGEMENT TEAM, AND
SEVERAL KEY POSITIONS REMAIN UNFILLED AT THIS TIME, INCLUDING THE
PRESIDENT OF NORTH AMERICAN RETAIL AND A CHIEF FINANCIAL OFFICER.
FAILURE TO FILL THESE POSITIONS IN A TIMELY MANNER WITH
APPROPRIATELY EXPERIENCED AND TALENTED PERSONS MAY RESULT IN OUR
INABILITY TO EXECUTE THE PLANS OUTLINED HEREIN.
o THE WIDELY ANTICIPATED GENERAL ECONOMIC SLOWDOWN IN 2001 MAY
NEGATIVELY AFFECT BUSINESSES GENERALLY AND IN PARTICULAR THE CORE
SMALL BUSINESS CUSTOMERS OF OFFICE DEPOT, THEREBY NEGATIVELY
IMPACTING THE ANTICIPATED PERFORMANCE RESULTS FROM OUR
INITIATIVES ANNOUNCED TODAY.
LIST OF UNITED STATES RETAIL STORES CLOSINGS
--------------------------------------------
OHIO 20 STORES UTAH 2 STORES
------------------- ------------- ----- ------------------ ------------
ARIZONA 9 STORES ILLINOIS 1 STORE
------------------- ------------- ----- ------------------ ------------
MICHIGAN 8 STORES KANSAS 1 STORE
------------------- ------------- ----- ------------------ ------------
NEW YORK 5 STORES MISSOURI 1 STORE
------------------- ------------- ----- ------------------ ------------
CALIFORNIA 5 STORES NEW MEXICO 1 STORE
------------------- ------------- ----- ------------------ ------------
CONNECTICUT 2 STORES PENNSYLVANIA 1 STORE
------------------- ------------- ----- ------------------ ------------
IOWA 2 STORES RHODE ISLAND 1 STORE
------------------- ------------- ----- ------------------ ------------
MASSACHUSETTS 2 STORES TENNESSEE 1 STORE
------------------- ------------- ----- ------------------ ------------
MINNESOTA 2 STORES
------------------- ------------- ----- ------------------ ------------
NEW JERSEY 3 STORES TOTAL 67 STORES
------------------- ------------- ----- ------------------ ------------
LIST OF CANADIAN RETAIL STORES CLOSINGS
---------------------------------------
ONTARIO 3 STORES
------------------- -------------
------------------- -------------
TOTAL 3 STORES
------------------- -------------
- --------------------------------------------------------------------------------
TOTAL NORTH AMERICAN RETAIL STORE CLOSINGS - 70 STORES
- --------------------------------------------------------------------------------
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